KPC told to be serious with divestment plan or risk nationalization

The government has threatened the East Kalimantan-based coal producer PT Kaltim Prima Coal (KPC) to be nationalized if the company is not serious in carrying out its mandatory divestment program, the local Kaltim Post daily reported on Thursday.

The threat was made by the provincial administration secretary Syaiful Teten after KPC refused to amend the framework agreement in the divestment process.

He said that the management of the coal producer had not shown any good intention to press ahead with the divestment plan.

The mandatory divestment of KPC?s 51 percent shares to local investors has been delayed for several times. The latest delay took place early this year after the company refused to allow two East Kalimantan-based companies to carry out due diligence, an important step in the divestment process.

The two local companies on the behalf of the provincial administration, and state owned coal producer PT Batubara Bukit Asam have been appointed to buy KPC?s 51 percent. The two local companies are allowed to buy 31 percent of the shares and PT Batubara Bukit Asam another 20 percent. But KPC management is not happy with the appointment of the local companies.

The supervision of the divestment of KPC shares which was previously handled by the Ministry of Energy and Mineral Resources was taken over by the Ministry for the Supervision of State Enterprises following the prolonged delay. (*)